13. RELATED PARTIES

The Company had sales to a related party, a physician who is the wife of the Executive Chairman. Revenues from this customer were approximately $23,000 for the year ended December 31, 2021 and approximately $17,000 for the year ended December 31, 2020. As of December 31, 2021 and 2020, the accounts receivable balance due from this customer was approximately $3,000 and $2,000 respectively, and is included in accounts receivable in the consolidated balance sheets.

The Company was a party to a nonexclusive aircraft dry lease agreement with Kashmir Air, Inc. (“KAI”), which is owned by the Executive Chairman. The Company recorded an expense of approximately $80,000 and $120,000 for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, the Company had no liability outstanding to KAI as compared to liability of approximately $1,000 as of December 31, 2020, which was included in accrued liability to related party in the consolidated balance sheet. The lease for the aircraft was renewed as of April 1, 2021 and terminated on August 31, 2021 and has been included in the ROU asset and operating lease liability on December 31, 2020. As a result of the lease termination, the Company incurred a loss of approximately $185,000 which has been included in loss on lease termination, impairment and unoccupied lease charges in the December 31, 2021 consolidated statement of operations.

The Company leases its corporate offices in New Jersey, its temporary housing for its foreign visitors, a printing and mailing facility, its backup operations center in Bagh, Pakistan and an apartment for temporary housing in Dubai, the UAE, from the Executive Chairman. The related party rent expense for the years ended December 31, 2021 and 2020 was approximately $186,000 and $185,000, respectively, and is included in direct operating costs and general and administrative expense in the consolidated statements of operations. During the year ended December 31, 2021, the Company spent approximately $2.0 million to upgrade the related party leased facilities and the leased aircraft. Current assets-related party in the consolidated balance sheets includes security deposits and prepaid rent related to the leases of the Company’s corporate offices in the amount of approximately $13,000 for both the years ended December 31, 2021 and 2020. On October 15, 2021, the Company entered into a one-year lease agreement with the Executive Chairman for an apartment for temporary housing in Dubai.

Included in the ROU asset at December 31, 2021 is approximately $483,000 applicable to the related party leases. Included in the current and non-current operating lease liability at December 31, 2021 is approximately $174,000 and $305,000, respectively, applicable to the related party leases.

Included in the ROU asset at December 31, 2020 is approximately $283,000 applicable to the related party leases. Included in the current and non-current operating lease liability at December 31, 2020 is approximately $202,000 and $92,000, respectively, applicable to the related party leases.

During 2020, a New Jersey corporation, talkMD Clinicians, PA (“talkMD”), was formed by the wife of the Executive Chairman, who is a licensed physician, to provide telehealth services. talkMD was determined to be a variable interest entity (“VIE”) for financial reporting purposes because the entity will be controlled by the Company. As of December 31, 2021, talkMD had not yet commenced operations. During the year ended December 31, 2021, the Company made arrangements to have the income tax returns prepared for talkMD and will advance the funds for the required taxes. The aggregate amount advanced was approximately $3,500.